CIRCULAR DATED MAY 27, 1995

RELATING TO THE RISK COVER RATIO (CAPITAL ADEQUACY)

National Bank of Cambodia

No 795-03

1- A licensed bank shall send to the National Bank, at the end of each quarter, a return entitled " calculation of the risk cover ratio " (capital adequacy) of which the model appears in the annex hereto, at the same time as submitting its financial position.

2- In the event that a bank’s risk cover ratio is less than one to twenty (net worth < 5% of the denominator) the bank shall identify in writing:

These written statements shall be attached to the calculation of the risk cover (capital adequacy) return when submitting it to the National Bank.

3- The National Bank shall act upon any breach in accordance with the gravity thereof and with regard to the prevailing legal recourse (Section 17 of the Law dated August 11, 1992 and Article 25 of Anukret of 16 November 1992).

4- These arrangements apply from the end of May 1995.

Signed:

Supervision & Examination Dept.

Deputy Governor

 

Calculation of Risk Cover Ratio

(in Million Riel)

(1) Net Worth :

 

The numerator N is net worth as defined in accordance with the annex to Regulation No 795-03 dated 22 May, 1995 dealing with Risk Cover Ratio.

N =-------

(2) Asset and off-balance sheet commitments given, denominated in any currency

 

Assets 1

 

Total Gross Assets (except depreciation)

+ ----------

Deduct :

 

. Provision allocated to specific risks

_ ...............

. Cash and gold

_ ...............

. Sight deposits with correspondent banks

_ ...............

. Deposit with NBC

_ ...............

. Confirmed guarantees, e.g. guaranteed deposits as required under specific contractual obligations 2

_ ...............

. Provision to be made but not yet booked, deducted from net worth calculation

_ ...............

. Others deductions, as agreed by NBC 2

_ ...............

Assets to be reported as part of the denominator :

D1=______

 

 

OFF BALANCE SHEET COMMITMENTS GIVEN 3

 

Total Gross Commitments given

+ .............

Deduct :

 

. Provisions allocated to specific risk

+ .............

. Confirmed guarantees, e.g. guaranteed deposits as required under specific contractual obligation 4

+ .............

. Provisions to be made but not yet booked, deducted from Net Worth calculation

+ .............

. Others deductions, as agreed by NBC 4

+ .............

. Commitments given arising from futures transactions 4

+ .............

Commitments given, to be reported as part of the denominator :

 

 

D2= ___

(3) Risk Cover Ratio :

 

R= N =................... % ( to 1 decimal place )

D1 + D2

 

If R < 5% please attach an explanatory note on the reasons for the shortfall, as well as details on remedial measures your institution has undertaken.

_________________________

1- Amounts to be adjusted with the balance sheet

2- Please provide details on separate page

3- Amounts to be adjusted with the balance sheet

4- Please provide details on separate page